Announcement of the Ministry of Commerce and the Ministry of Civil Affairs on Matters Relating to Foreign Investors' Establishment of For-profit Elderly Care Institutions

With a view of promoting the healthy development of the elderly care service industry in China and the opening-up of social service industry, and further implementing the Decision of the Central Committee of the Communist Party of China on Several Major Issues Concerning Comprehensively Deepening Reforms and Several Opinions of the State Council on Speeding the Development of the Elderly Care Service Industry (Guo Fa [2013]No.35), and in accordance with the Law on Sino-Foreign Equity Joint Ventures, Law on Sino-Foreign Cooperative Joint Ventures, Law on Wholly Foreign-owned Enterprises, Law on the Protection of the Rights and Interests of the Elderly and Measures forPermitting the Establishment of Elderly Care Institutions and other relevant laws, regulations and departmental rules, the Announcement of the Ministry of Commerce and the Ministry of Civil Affairs on Matters Relating to Foreign Investors' Establishment of For-profit Elderly Care Institutions (hereinafter referred to as the "Announcement") is hereby issued to announce matters relating to the establishment of for-profit elderly care institutions by foreign companies, enterprises and other economic organizations or individuals (hereinafter referred to as the "foreign investors") to engage in elderly care services in China as follows:

Article 1 Encourage foreign investors to establish for-profit elderly care institutions in China independently or with Chinese companies, enterprises and other economic organizations in a joint venture or cooperative way.

Article 2 The foreign-invested for-profit elderly care institutions shall abide by relevant laws, rules and regulations, aim at providing social services, pay tax in accordance with the law and operate in compliance. Their legal operating activities and their contributors' legitimate rights and interests are under the protection of law.

Article 3 Foreign investors intending to establish for-profit elderly care institutions shall submit the following materials on the application for establishment of foreign-invested enterprises to the competent departments of commerce at the provincial levels where the institutions are proposed to be located (namely the competent departments of commerce of all provinces, autonomous regions, municipalities directly under the Central Government, cities specifically designated in the state plan and Xinjiang Production and Construction Corps):

1. application for the establishment;

2. description about the conditions (including the place, security, health care and so on);

3. contract and articles of association (a foreign-invested enterprise only needs to submit its articles of association);

4. namelist of the members of the Board of Directors and directors delegation letter;

5. notice on the pre-approval for the names;

6. description of the foreign investors' working experience and relevant supporting documents, or the descriptive document on the engagement of management team equipped with corresponding experience in the elderly care service industry; and

7. Other materials required to be provided according to the laws, rules and regulations.

Article 4 A competent department of commerce at the provincial level shall make a written decision on approval or disapproval within 20 days upon its acceptance of the application concerned. Where the application is approved, the foreign investor concerned shall be awarded the Approval Certificate of Foreign-invested Enterprise, with words as "operate under the Permit for Establishment of Elderly Care Institutions" added in the column of business scope; where the application is disapproved, reasons therefor shall be told.

Article 5 A foreign investor shall handle the formalities for registration of foreign-invested enterprises within one month upon receipt of the Approval Certificate of Foreign-invested Enterprise with the administration for industry and commerce concerned.

Article 6 After the registration, the foreign-invested enterprise shall apply for and obtain the Permit for Establishment of Elderly Care Institutions in accordance with relevant provisions of the Measures forPermitting the Establishment of Elderly Care Institutions. No foreign-invested for-profit elderly care institutions or foreign investors shall provide elderly care service or charge fees or admit the elders in any name before obtaining the said permit and being approved for registration in accordance with the law.

Article 7 Foreign investors are encouraged to participate in the transformation into the enterprises from the institutions of public elderly care specifically providing for-profit services to the society. During the transformation, issues such as the protection of employees' interests and the value maintenance and appreciation of state-owned assets shall be handled properly.

Article 8 Foreign-invested for-profit elderly care institutions can engage in domestic investments relating to the elderly care service. Foreign investors are encouraged to develop the elderly care institutions on a grand scale, operate the same in a chain mode and develop quality brands of elderly care institutions.

Article 9 Foreign-invested for-profit elderly care institutions enjoy the same preferential tax policies and policies on reduction and exemption of administrative and institutional fees as those available to domestic-invested for-profit elderly care institutions.

Article 10 The application for establishing foreign-invested real estate enterprises that are set up through changing such usage conditions as the land use or the plot ratio of the land for construction of elderly care facilities shall not be approved. Foreign-invested for-profit elderly care institutions shall not engage in business such as residential discount for elderly care.

Article 11 Where the business scope of a foreign-invested for-profit elderly care institution includes the medical and health service, such institution shall handle the formalities for submission for approval in accordance with relevant policies.

Article 12 The competent departments of commerce at the provincial level shall strengthen the statistical work concerning foreign-invested for-profit elderly care institutions, and when issuing the certificate for approval, choose "Elderly and Disability Service"(Paragraph 8414 of National Economic Industrial Classification) in terms of the category of industry.

Article 13 Foreign-invested for-profit elderly care institutions established in accordance with the Announcement shall participate in the joint annual report of foreign-invested enterprises on time.

Article 14 The Announcement applies mutatis mutandis to the establishment of for-profit elderly care institutions by investors from Hong Kong Special Administrative Region, Macao Special Administrative Region and Taiwan Region. In case of any inconsistence between former provisions and the Announcement, the Announcement shall prevail.

Article 15 If the local competent departments of commerce and civil affairs encounter with any problems, please feel free to contact the Ministry of Commerce and the Ministry of Civil Affairs in a timely manner.

Contact person: Sun Xiaoyu, Department of Foreign Investment Administration, the Ministry of Commerce

Tel.: 010-65197327 Fax: 010-65197322

Contact person: Zhang Xiaofeng, Department of Social Welfare and Charity Development, the Ministry of Civil Affairs

Tel.: 010-58123258Fax: 010-58123256

The Ministry of Commerce and the Ministry of Civil Affairs

November 24, 2014

(All information published in this website is authentic in Chinese. English is provided for reference only. )